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Feingold: Congress can, should propose better bailout

John Nichols  —  9/30/2008 3:27 pm

There is a lot of whining in Washington and on Wall Street about Monday's surprise decision of the U.S. House of Representatives to reject the proposed $700 billion bailout plan for the nation's ailing financial-services industries.

But Sen. Russ Feingold, D-Wisconsin, is not wringing his hands.

Of course, Feingold is concerned about the turbulence in the banking and insurance industries.

But he believes that the House vote creates an opening to develop a better plan. And the Wisconsin Democrat is proposing some priorities for doing so.

"Yesterday's vote on the bailout proposal in the House of Representatives gives Congress an opportunity to address the major flaws in the proposal," the senator said on Tuesday. "We can do so and still act in an expedited manner."

The third-term senator, who often has been at odds with the Capitol consensus with regard to financial issues, is offering a list of specific ideas about how to improve the proposal.

"First, the negotiators should offset the cost of the proposed bailout so that taxpayers don't get saddled with it. There are plenty of proposals out there that can be considered, including asking Wall Street to bear at least some of the cost," says Feingold.

"Second, negotiators should add meaningful provisions to help families facing foreclosure. This is more than just a matter of fairness - the housing crisis is the root cause of the credit market collapse, and unless we address it, any rescue package is far less likely to work," he continues. "Finally, negotiators must address the deeply flawed regulatory structure that paved the way for this crisis. The administration and others have said such reforms must wait for another day, but once a rescue package is enacted, we lose the leverage needed to enact tough reforms to get the financial sector to clean up its act, and we risk having to deal with this same mess all over again."

John Nichols  —  9/30/2008 3:27 pm